Germany

Germany’s Bundesbank nearly doubled its already large risk provisions for 2012, saying Europe’s sovereign debt crisis was not over and urging central banks to stay away from fiscal policy, the Financial Times reported. The Bundesbank added €6.7bn to its provisions, bringing them up to €14.4bn, the bank said in its annual report published on Tuesday. The increase partly reflected the risk it perceived in holding the sovereign debt of countries hit by the crisis such as Spain, Italy and Greece.

Germany is growing wary of saddling bank-account holders with losses as part of a rescue for Cyprus and no longer insists on a financial contribution from the International Monetary Fund, a close ally of Chancellor Angela Merkel said, Bloomberg reported. Michael Meister, deputy parliamentary floor leader of Merkel’s Christian Democratic Union party, floated concessions that would hasten the wrap-up of nine months of aid talks and lessen the risk that a financial accident in Cyprus, which makes up barely 0.2 percent of the euro-zone economy, could revive European market turbulence.

Insolvent German street light maker Hess is holding talks with potential investors with a view to finding a buyer for the scandal-hit company soon, Reuters reported. Hess said on Tuesday it had received expressions of interest from several strategic and financial investors, whom it did not name, and that it had held talks with several of them. The firm, whose search for a buyer is being led by consultancy Ebner Stolz, said it aimed to be sold as a whole if possible. Hess's insolvency filing in February came just months after its stock market debut.

Greater social justice, higher taxes for the wealthy, and a statutory minimum wage will be at the heart of a left-leaning election campaign by Germany’s Social Democrats bidding to unseat Angela Merkel, the German chancellor, in September’s general election, the Financial Times reported. The programme, including stricter regulation of banks and other financial institutions, and statutory quotas for the appointment of women as company directors, was unanimously approved by the Social Democratic party executive meeting in Berlin on Monday.

German banks' use of European Central Bank crisis funding dropped by a third in January from the previous month, a further sign that banks in the heart of the euro zone are returning to money markets after last year's credit squeeze. Banks in countries on the periphery of the 17-member bloc still rely on central bank lending, which, while at a record-low interest rate of 0.75 percent, is above market rates. The divergence complicates the ECB's interest rate-setting plans.

German lighting designer Hess filed for insolvency on Wednesday only months after celebrating its stock exchange debut, deciding an ongoing fraud investigation would scupper any hopes of raising fresh equity, Reuters reported. "After intensive examinations, the management board came to the conclusion that Hess is illiquid, has no positive prognosis of the continuation of the enterprise and the company is, according to the current status of examinations, over-indebted," the company said in a statement.

German do-it-yourself chain Praktiker AG is closing its stores in Turkey and withdrawing from the country after failing to sell the nine stores its operates there, Reuters reported. The company, which is battling to return to profit, said on Monday its Turkish subsidiary filed for managed insolvency proceedings with an Istanbul court earlier in the day. "We cannot afford a persistent loss-maker like Turkey.

It has been a difficult turnaround for Deutsche Bank. The big German financial firm said on Thursday that it lost 2.2 billion euros ($3 billion) in the fourth quarter, as it was hit by legal costs and expenses related to its restructuring, The New York Times DealBook blog reported. “The results underline the task ahead for Jürgen Fitschen and Anshu Jain, the co-chief executives who took over the bank less than seven months ago and have declared their intention to deal more severely with the legacy of the financial crisis,” Jack Ewing writes in DealBook.

Despite a drumbeat of optimistic forecasts from economists and upbeat statements from various European leaders, the actual news on the economy continues to be grim, with figures released Tuesday showing that Germany, the Continent’s flagship economy, contracted by about 0.5 percent in the final months of last year, the International Herald Tribune reported. Combined with a flurry of disappointing results recently in other major economies, the stumble raised questions about Europe’s ability to escape recession.

Cyprus's hopes of agreeing a eurozone bailout were thrown into fresh confusion on Wednesday as German politicians from across the spectrum warned that the aid package could be vetoed by the Bundestag, The Guardian reported. Angela Merkel, the German chancellor, is taking a hard line on Cyprus, saying the country must agree to wideranging economic reforms and privatisations before she would support a bailout. Negotiations between the Cyprus government and international lenders have stalled, with the Communist president, Dimitris Christofias, refusing to accept asset sales.